China LGFV Stress Index

Formula

LGFV Stress = f(LGFV bond spreads, rollover calendar, land-sale revenue, policy bank lending)

• LGFV bond yields – Local government financing vehicle offshore/onshore spreads
• Land fiscal revenue – Local government fund budget receipts (MoF)
• Policy bank lending – CDB/ADBC infrastructure loan pipeline

Why It Matters

Local Government Financing Vehicles are the epicentre of China's hidden debt stress. When land sales collapse and LGFV bond spreads widen simultaneously, rollover risk spikes — even if official central government debt looks manageable. This composite distills four opaque signals into a single stress coordinate for the shadow sovereign balance sheet.

Institutional Use

EM sovereign desks and China macro specialists use LGFV stress as a leading indicator for PBOC easing and property-sector policy. IMF Article IV surveillance highlights LGFV rollover as the key China tail risk. GraphiQuestor's Intel China terminal tracks this alongside the Iceberg Ratio.

How to Read It